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Amigo Holdings sees mountain of complaints send it sliding into losses

Published: 08:13 20 Jul 2020 BST

Amigo Holdings PLC -

Amigo Holdings PLC (LON:AMGO) tumbled into a loss in the past year as it was hit by £244mln of costs and provisions of dealing with a torrent of customer complaints. 

The controversial guarantor loans provider reported complaints cost of £126.8mln for the year to March 31 and after a substantial increase in the volume of complaints since the year-end it to make a provision for a further £117.5mln.

So, despite revenue growing 8.7% to £294.2mln, the company swung to a statutory loss after tax of £27.2mln from the £88.6mln profit a year earlier.

The board pointed out that “a material uncertainty exists relating to going concern due to COVID-19 and the potential for either a sustained high level of customer complaints redress or a negative outcome of the [Financial Conduct Authority] investigation”, though felt there is enough liquidity on the balance sheet to continue to support the ongoing business activity.

Amigo has made a pledge to the FCA that it will reach a position by the end of October where all complaints are dealt with appropriately within eight weeks, while the FCA has launched an investigation into the company’s creditworthiness assessments.

The company had put itself up for sale in January after founder James Benamor indicated he was looking to sell his 61% stake, but the formal sale process concluded with the withdrawal of the potential acquirer. 

Former chief executive Glen Crawford was then reappointed as CEO and the company aims to continue “a determination to resolve the challenges we face”.

Amigo said former Dresdner Kleinwort executive Jonathan Roe has been appointed as non-executive director and chairman designate, highlighting his “25 years of experience advising public companies on major corporate transactions”.

He has also been on the board of Vanquis Bank for over seven years including, three and a half as chairman.

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